knowledge topics
Powers of Attorney for Property
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Explain the purpose of a power of attorney for property.†
- Explain risks associated with failing to appoint a power of attorney for property.
- Identify names of documents used to denote that an individual or entity has decision-making power for property of another individual, such as:
- Power of attorney
- Power of attorney for property
- Mandate
- Explain the factors to consider in choosing an attorney for property.1
- Explain advantages and disadvantages of using a corporate attorney for property.
- Explain types of powers of attorney for property.1
- Limited
- General
- Continuing/enduring
- Contingent/springing
- Explain when the attorney’s power under a power of attorney for property becomes effective.
- Limited
- General
- Continuing/enduring
- Contingent/springing
- Explain when the attorney’s power under a power of attorney for property ceases to be effective.
- Limited
- General
- Continuing/enduring
- Contingent/springing
- Explain responsibilities of an attorney under a power of attorney for property, such as:
- To act in the best interest of the donor
- To keep accurate records of dealings/transactions undertaken on the donor’s behalf
- To act for the donor with the utmost good faith and to avoid situations where there is a conflict of interest
- To keep the property and money of the donor separate from their own
- Explain actions that an attorney for property may engage in on behalf of the grantor, such as:
- Open, operate, close financial accounts
- Purchase investments according to the statutory rules for investing
- Apply for benefits for which the grantor is entitled
- Buy goods and services
- Lend, sell, store or dispose of personal property
- Purchase, maintain or sell real property
- Start or defend lawsuits
- Receive information and documentation for which the grantor is entitled to receive
- Identify actions that an attorney for property may engage on behalf of the grantor when specifically provided for in the power of attorney document or by the courts, such as:
- Making charitable donations
- Making gifts or loans to family
- Explain actions that an attorney for property is prohibited from engaging in on behalf of a grantor, such as:1
- Creating, changing, or revoking a will for the grantor
- Naming or changing a beneficiary on a life insurance plan or registered plan owned by the grantor
- Establish a new attorney to act on behalf of the grantor
- Identify potential activities for which an attorney may require permission from the court, such as:
- Making themselves a joint owner of the grantor’s property
- Taking fees
- Providing gifts to family and friends from the grantor’s property
- Using property owned by the grantor for the benefit of another individual other than the grantor.
- Identify that an attorney for property may be held financially liable by the grantor (or the beneficiaries of a grantor’s estate) should they contravene their duties.
- Identify that there may be risks associated with a business owner naming another business owner as an attorney for property.
- Identify events that may terminate limited and general powers of attorney for property, such as:
- Revocation of power of attorney by grantor
- Death or incapacitation of grantor
- Death, incapacitation, or resignation in writing of attorney
- Attorney and grantor end their spousal relationship
- Attorney is convicted of an offence under the respective power of attorney act in the jurisdiction or an offence for which the donor was a victim
- Court appoints a power of attorney for property
- Creation of a new continuing/enduring power of attorney
- Corporation that acts as an attorney dissolves, winds up or ceases to carry on business
- Identify events that may terminate a continuing/enduring power of attorney for property, such as:
- Revocation of power of attorney by grantor
- Death of grantor
- Death, incapacitation, or resignation in writing of attorney
- Attorney and grantor end their spousal relationship
- Attorney is convicted of an offence under the respective power of attorney act in the jurisdiction or an offence for which the donor was a victim
- Court appoints a power of attorney for property
- Creation of a new continuing/enduring power of attorney
- Corporation that acts as an attorney dissolves, winds up or ceases to carry on business
- Identify events that may terminate a contingent/springing power of attorney for property, such as:
- Revocation of power of attorney by grantor
- Death of grantor
- Death, incapacitation, or resignation in writing of attorney
- Attorney and grantor end their spousal relationship
- Attorney is convicted of an offence under the respective power of attorney act in the jurisdiction or an offence for which the donor was a victim
- Court appoints a power of attorney for property
- Creation of a new continuing/enduring power of attorney
- Corporation that acts as an attorney dissolves, winds up or ceases to carry on business
- Identify that an attorney for property may be entitled to compensation for their services.1
† Power of attorney for property is being used generically to denote any document that an individual may use to grant decision making ability and/or the ability to act on their behalf with respect to their property to another individual.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
previous / Foundations of Powers of Attorney